THE MOLE

The patter of tiny feet

APRIL 7, 2002

The Mole's personal assistant Miss Pringle-Featherby (of the Berkshire Pringle-Featherbys) has remarkably small feet and, being a neat young lady, tends to wear those narrow skirts that accentuate certain parts of the anatomy in a charming way but make walking quickly rather difficult. Miss Pringle-Featherby does not run to catch buses.

But, now and then, this valuable member of The Mole's staff does receive news which requires her to make haste to deliver news to her employer.

This means that the quiet and ordered corridors of the SIS Building are disturbed by a scuttling of feet as Miss Pringle-Featherby rushes from the Code Room to The Mole's office. One can hear the news before it arrives. The Mole always thinks of the phrase "the pattering of tiny feet" but knows that if he were to ever mention it, Miss Pringle-Featherby will blush.

At the moment The Mole has been expecting to hear the patter of tiny feet on an almost daily basis. Formula 1 is suffering from a financial squeeze and as usual this is having effects across the board. Drivers will soon find that teams are not willing to pay them what once was the going rate. Engineers with financial demands above their work stations will have to swallow hard and accept smaller cheques. One or two of the teams may go to the wall.

This morning The Mole heard Miss Pringle-Featherby at extra high speed. Has one of the teams gone bankrupt? he thought. It has been expected for some time.

There was a knock at the door.

"Urgent despatch from Our Man in Munich," she said with a wonderfully plummy voice one can rarely find these days, except in the Admiral Coddrington pub in Chelsea.

The Mole read the ticker-tape message. And swung his chair around to look out across the wilds of Pimlico.

"And now the game begins..." he said, thinking himself for a moment to be a figure from a John Le Carre novel. "Call in the Crisis Analysis Team. We need to know what this means."

The message was simple: KirchPayTV GmbH & Co had given up the fight and declared itself bankrupt. The company will now be taken over by an administrator to see what can be saved.

This sounds pretty dull for racing fans but it is very significant: KirchPayTV GmbH & Co is the company that supplies a goodly chunk of income to the Formula One group of companies. The Mole is sorry to say that "a goodly chunk" is hardly a very precise figure but such things are difficult to ascertain, even if one has spies inside Bernie Ecclestone headquarters in Princes Gate.

Obviously the percentage of the income goes up and down depending on the deals in place at any given time but The Mole believes that the Kirch contribution is at least 20% of the total money.

And that is a big worry for Formula 1 teams because they are all going to take a financial hit if the cash does arrive from Germany. There is also the possibility that KirchPayTV's pay-per-view channel Premiere may also be shut down and that will mean the end of pay-per-view TV in Germany - at least for the moment.

Thus the repercussions of the KirchPayTV collapse are enormous and will hasten the demands for a solution to the problems that current exist in Formula 1 circles.

The filing will not (for the moment) affect the ownership of the Formula One group because those shares are owned by a different Kirch company called Kirch Beteiligung GmbH & Co. This is tottering on the brink of extinction but it is currently still standing, although it may not survive for much longer.

The Mole held an emergency meeting and within the hour several conclusions had been reached. The most important of which is that this must hasten Formula 1 towards a long-term deal over its future. It will also lead to a major rethink in the way Formula 1 is televised.

In fact, according to The Mole's men in the Formula 1 Broadcasting Division, the policies have already started to change with the emphasis now being to look at the ways in which the overall show can be improved so that what is called "the world feed" can be improved. At the moment all the efforts go on the pay-TV feed (known in the business as the F1 Supersignal". This was supposed to be the engine to drive money into the company but it has failed in every market so far, notably in Germany where it was supposed that the Schumacher factor would make it a success. The failure of Kirch PayTV is the end of the dream. Looking elsewhere The Mole sees that South America's PSN has shut down and Canal Plus in France is struggling and has already renegotiated its deal with Formula One. All that is left now is SkyTV's new F1 coverage in Britain, but at the moment there are no figures for that.

The Mole's committee concluded that the best way to move forward now would be to turn the famous F1 TV facility over to producing the world feed, with all the in-car footage, interviews and access that is currently available only to pay-TV. This would improve the F1 package which is generally available and would give the TV companies involved an urge to pay more for the programmes. This will help the group to replace some of the missing revenues although it is unlikely that they will be matched in the short term.

The issue of funding the teams is still important despite the fact that TV money makes up probably only 10% of the budget of each team. But every 10% counts, particularly in the hard times.

It may not be enough to close down any of the teams but The Mole expects to hear the pattering of tiny feet in his corridors again in the next few days.